Firms' fee income rises by nearly 5% in Q2 of 2015-16
Deloitte quarterly survey finds average fee growth of nearly 5% across UK's 100 largest law firms in the second quarter
December 21, 2015 at 07:08 PM
5 minute read
The original version of this story was published on Law.com
The UK's largest law firms have experienced an average fee growth of almost 5% in the second quarter of the 2015, research by Deloitte has found.
During the three months to 31 October firms' fee income increased by 4.7% compared with the same period last year, according to Deloitte's survey of the UK's top 100 firms.
The professional services giant's latest quarterly legal sector survey found average fee income increases of just over 5% were achieved by both the top 10 firms and those ranked between 26 and 100 during Q2. However, those ranked between 11 and 25 achieved more modest growth of 2%.
Growth in the largest firms was achieved through an increase in the rates charged to clients, while the growth for firms ranked 26-100 was predominantly due to increases in fee earner numbers of around 4%.
Jeremy Black, professional services partner at Deloitte said: "For firms outside the 1-10 size category, increases in fee income have largely been achieved through growth in fee earner numbers rather than increases in chargeable hours per fee earner or rates."
Average fees per earner in Q2 were up 1.6% from last year's Q2 figure.
The survey also found the top 100 UK firms have achieved an overall revenue increase of 4.5% in the first half of the 2015-16 financial year.
Looking ahead to the second half of 2015-16, Black said that "a focus on pricing and profitability will be key, given some of the pressures firms are seeing on fee earner salaries".
"Some firms are employing initiatives that look at how they deliver services and where they deliver them from, which improves how they price. Firms have got much better visibility of the cost of delivering legal services."
The survey found that participants expected a reasonably strong Q3, with firms predicting average fee income increases of 6% and full year revenue growth of between four and 5%.
As more and more firms push for a truly international offering, Black believes they are right to remain cautious in their overall global outlook. "The world is so much more connected now, so any geo-political shocks have a much greater transmission," he said. "Although things are progressing in a reasonably positive way, firms are constantly keeping an eye on the horizon."
"Hopefully things will remain positive in regards to capital markets and IPOs, however if there are any shocks in other countries, this could have a significant impact on the law firms in the survey".
The UK's largest law firms have experienced an average fee growth of almost 5% in the second quarter of the 2015, research by
During the three months to 31 October firms' fee income increased by 4.7% compared with the same period last year, according to
The professional services giant's latest quarterly legal sector survey found average fee income increases of just over 5% were achieved by both the top 10 firms and those ranked between 26 and 100 during Q2. However, those ranked between 11 and 25 achieved more modest growth of 2%.
Growth in the largest firms was achieved through an increase in the rates charged to clients, while the growth for firms ranked 26-100 was predominantly due to increases in fee earner numbers of around 4%.
Jeremy Black, professional services partner at
Average fees per earner in Q2 were up 1.6% from last year's Q2 figure.
The survey also found the top 100 UK firms have achieved an overall revenue increase of 4.5% in the first half of the 2015-16 financial year.
Looking ahead to the second half of 2015-16, Black said that "a focus on pricing and profitability will be key, given some of the pressures firms are seeing on fee earner salaries".
"Some firms are employing initiatives that look at how they deliver services and where they deliver them from, which improves how they price. Firms have got much better visibility of the cost of delivering legal services."
The survey found that participants expected a reasonably strong Q3, with firms predicting average fee income increases of 6% and full year revenue growth of between four and 5%.
As more and more firms push for a truly international offering, Black believes they are right to remain cautious in their overall global outlook. "The world is so much more connected now, so any geo-political shocks have a much greater transmission," he said. "Although things are progressing in a reasonably positive way, firms are constantly keeping an eye on the horizon."
"Hopefully things will remain positive in regards to capital markets and IPOs, however if there are any shocks in other countries, this could have a significant impact on the law firms in the survey".
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